The Capital Structure And Efficiency Of Listed Sme Companys In China

Small and Medium Enterprises (SME) will be the power engine for the future economy growth since China is a county with factor endowment of large labor force and small capital base. Nevertheless, because the enterprise size is relatively small and original capital accumulation is insufficient, and with affecting from modern financial system, whether with regarding to the way of raising funds or the difficulty level, to receive funds from financial markets has been always a serious problem for the development of SME. In order to solve this problem,’Small and Medium Enterprise Market’was approved in Shenzhen in2004. By October2008, there are274companies in this market.The Small and Medium Enterprises obtain the capital by low financing cost, and it becomes dominator of scarce resources. In order to improve the co-development of the company and micro-economic, the SME must use resources most effective, and it need the SME must have a higher production efficiency.After listed, the capital structure of SME must be changed, also make the management efficiency changed. The change of capital structure not only maintain the ratio change of credit and stock, but also concludes change of credit structure and stock structure. As to the listed company of SME, is the debt financing or the equity financing benefit to the improvement of company’s management efficiency? Private enterprise is the main body of listed company of SME, and it has the feature of clear property relative to state-owned company, then, does the private holding company benefit to the improvement of management efficiency relative to the state-owned company? After listed, the stock of SME will be diluted, dose the dispersed ownership structure benefit to improve the company’s management efficiency? The research conclusions of this problem is not only beneficial to master the characteristics of listed company of SME, but also can provide evidence for the development of SME broad, and it also can provide reference for the reform of capital market and the supporting policy making for SME.According to the stated research ideas, this paper is structured as follows:The first chapters Ⅰ and Ⅱ are introduction and theoretical review. It describes the background, asks questions, and illustrates the significance of this study and study of the basic framework and innovation, and weaknesses. This involves defining basic concepts of analysis and comparison of capital theory. It provides theoretical basis for empirical analysis. Chapter III, theoretical analysis on operating performance and Capital Structure. From the theory discussed in more detail the correlation between the two aspects, the main analysis of the debt financing and equity financing ratio and the relationship between company performance and capital structure in corporate governance, which can affect the operating efficiency of enterprises. Chapter IV, the analysis of the SME board capital structure characteristics. From the development and the role of the SME board, the roles played by the SME board in establishing a multi-layered capital market after enriching financing channels for SMEs in China were analyzed and thus analyzed the features of current capital structure of China’s SME board. Chapter V, analysis of influence factors in capital structure in China’s SME board and main board market. Introduction to effect factors models of SMEs’Capital Structure, data processing and analysis of the results, which help to find the factors regulating the capital structure and optimizing the allocation of resources. Chapter VI, the thesis offers impact analysis of capital structure affecting corporate performance assessment in China’s SME board and main board market. To evaluate the companies’performance in China’s SME market after introduction of SME market corporate performance assessment methods and selection of proper assessment methods. Chapter VII, after assessing the performance, it regress business performance by applying capital structure and other factors to observe the impact of existing capital structure of the SME market to business performance. Chapter VIII, the summary of this thesis and policy recommendations.Focusing on the listed companies in the SME board, the thesis intends to study the relationship between their capital structure and operation performance, from the angle of corporate governance. The framework of this paper is arranged as below:Firstly, the former theories about capital structure are introduced in chronological order, divided into early capital structure theory, modern capital structure theory and contemporary capital structure theory. The researches on the relationship between capital structure and operation performance of SMEs are indispensable references for empirical analysis in this paper.Secondly, choosing listed companies in China’s SME market as samples, multi-angle studies are carried out by the features of capital structure, including:the differences of capital structure among the SMEs in its board, that between listed companies in the SME market and main board listed company, and that between listed companies in the SME market and foreign markets as well.Thirdly, after reviewing the evaluation approaches of enterprise efficiency, the paper assesses the performances of listed companies in China’s SME market by DEA methods and then compared them with other synchronous companies in China stock market.Finally, the factors which influence the operation performance are studied from the comparative static angle. In that case, the impact of the factors on operation performance can be concluded by regression, concerning capital structure of listed companies in China’s SME market and other factors.